Kent Hunsaker, Executive Director, Confederation of OR School Administrators

Staff Present: Paul Warner, Legislative Revenue Officer

Steve Meyer, Economist

Kristi Bowman, Committee Assistant

TAPE 39, SIDE A

002

Chair Butler

Calls meeting to order at 1:02 p.m.

OPENS PUBLIC HEARING FOR HOUSE BILL 2450

010

Steve Meyer

Gives overview of House Bill 2450 (Exhibit 1). The bill removes the sunset date of the high cost disabilities grant and small school district grant. Expiration date is July 1, 2005. Refers to the supplemental handouts of the OR Statute 715, section 29 (Exhibit 2), OR Statute 715, section 1 (Exhibit 3), and to the HB 2450 Background handout (Exhibit 4).

061

Chair Butler

Comments about some eastern OR districts in comparison with some coastal districts such as Coos and Curry that do not receive reimbursement funds in some categories.

078

Meyer

Responds that he does not have information for specific districts, but perhaps one of the witnesses may have that information.

084

Rep. Berger

Discusses that this bill was in the 2003 session. She explains that every district must educate a high-cost student who moves into a district and absorb the cost. Provides more information regarding the current distribution formula pertaining to disabled students and the related costs.

116

Rep. Boquist

Clarifies that this bill reauthorizes funding that has been in effect for the past 2 years.

125

Rep. Esquivel

Comments that he observed a class in Medford for challenged youth funded by an ESD, not by a grant. Asks about the differences between ESD funding and school district funding.

133

Meyer

Responds that an ESD has its own money to spend for special education. That amount is added to the school district funding for that student as a total cost. The grant money is reimbursed only to school districts, not to ESDs.

170

Reg McShane

Before beginning testimony, he answers the previous question from Rep. Esquivel regarding ESDs. There is a process called “resolution” in which the school districts within an ESD can vote to allocate a portion of the ESD funds to certain programs such as special education. Amity school district spends much more on special education than what is apportioned from the ESD.

200

McShane

Testifies in support of HB 2450. Districts do not have a lot of choice regarding how they handle high-cost students. When a high-cost student moves into a district they must be educated, as previously stated by Rep. Berger. For example, there are only 830 students in the Amity district so there is no economy in numbers. They don’t have specialists in the district, so they use specialists in the ESD.

225

McShane

Regarding the small schools grant, he cites the amounts allocated for

this biennium. Discusses several part-time teaching positions in his district. The governor’s budget would cause an $80,000 cut in areas the district has any control over. The $46,000 small school grant for the Amity district is vital to maintain certain services.

252

Rep. Hass

Asks whether it would be easier to have the ESD provide all the specialists instead of the local district, eliminating administrative costs of the two systems.

270

McShane

Responds that if the ESD could take care of some costs like printing it would definitely help small districts.

294

Tressider

Adds that specialists are not always available for every district. Even if there was no ESD to provide those services, some kind of coalition is still necessary to provide those services

315

Rep. Hass

Suggests looking into having ESDs in larger areas help smaller districts with some of these issues.

327

Rep. Boquist

Asks for further explanation from witnesses regarding the funding process. Are the funds being duplicated?

340

McShane

Discusses the funds used for the two high-cost students in the Amity and the resolution funds from the ESD (see Exhibit 4).

381

Rep. Boquist

Asks about the difference between the amount allocated and the ESD funds provided.

383

McShane

Responds that special education dollars are spent, whether they are district or resolution dollars. The total expended column reflects the actual costs for the two special education students.

401

Rep. Riley

Clarifies with witnesses about “funding expended” (p.6 of Exhibit 4) and the other high-cost disability dollar amounts stated in the exhibit for the Amity district.

450

Maureen Casey

Testifies in support of HB 2450. She served on a legislative education task force that reported that high-cost students tend to migrate to urban districts because of more medical and social services available. The impact is equally significant in smaller districts because they have limited resources and the ability to have access to specialists.

TAPE 40, SIDE A

040

Casey

Discusses various scenarios of high-cost students. She supports the removal of the sunset for the high-cost grant. It is a strong formula: there are 1,915 students eligible representing only 2.7% of the total student population.

071

Ruth Gelbrich

Testifies in support of HB 2450 and its impact on the Salem-Keizer school district. Explains specific needs mandated and gives examples of three examples of students in her district who need various levels of specialized services. Discusses specific dollar amounts expended.

115

Rep. Boquist

Asks Ms. Casey about the financial impact of high-cost students. Across the board, does funding vary according to the different needs of special education students? Is $25,000 an average cost?

130

Casey

Responds that the funding does differ, and that $25,000 is an average cost. The beauty of the formula is that every dollar spent on special education is captured because all costs are reported, and this prevents duplicative funding.

140

Rep. Boquist

Additional comments about the grant monies provided.

151

Casey

Responds that if a district’s and ESD’s total outlay for a special education student is less than $25,000, and then they cannot apply for the grant money. If the funds exceed $25,000, then they can apply for the difference above $25,000.

158

Rep. Boquist

Asks if Ms. Casey has seen instances of double funding.

160

Casey

Responds no.

171

Rep. Komp

Follow-up question. States that 5% of general fund money goes to the ESDs. How much of that money is spent on special education students?

173

Casey

Responds that this information is available, but the data is only available by going to each of the 20 ESDs. It is not aggregate data.

191

John Marshall

Provides informational testimony on disability funding. There are federal dollars that provide a portion of the district’s expenditure. Services are the responsibility of the resident school districts. Discusses ESD and resolution funding process.

278

Chair Butler

Asks about funding sources mentioned in testimony: school district, ESD, and federal. What are the mechanics of how the method of funding is chosen?

300

Marshall

Explains that every school district with a disabled student receives federal funding. If that amount does not cover the costs, then the district looks to state funding and ESD resource sharing.

315

Kent Hunsaker

Testifies in support of HB 2450 pertaining to small high school districts in order to achieve fairness across the state. In small high school districts it is difficult to provide programs because of low student population. Adds additional information about high-cost students. States that none of the federal dollars claimed for high-cost students can be included in local funding requests

390

Rep. Hass

Regarding the sunset repeal, asks if it would be more prudent to just push back the sunset date

395

Hunsaker

Comments that a task force is looking at various ways to save money and plans on making recommendations soon. Agrees that adjustments will always need to be made to the funding amounts, whether it is by sunset dates or annual reviews.

TAPE 39, SIDE B

020

Rep. Komp

Asks “high-cost” question about state totals stated on page 1 of the background handout (Exhibit 4). Where does the other $52 M come from [referring to the total expended amount minus the prorated grant amount]?

031

Meyer

Explains that amount reflects the $25,000 per student who isn’t eligible for grant funding. That is subtracted out of the total expended to get the eligible costs.

043

Hunsaker

Adds supplemental information about the high-cost dollars expended.

064

Marshall

In response to Rep. Komp’s question, he adds that students with disabilities are first in line for funding regardless of the cost because of federal mandates.

073

Rep. Komp

Requests clarification of small school definition. Refers to ORS 715.29 (Exhibit 2).

085

Meyer

Responds that the definition is in Section 29.2. Section 30 pertains to a district with a small high school and eligibility for grant money.

100

Marshall

Adds that the grant eligibility only applies to a small school district with a small high school.

111

Rep. Riley

Asks about funding for high-cost disabled student. States that his understanding is that the first $25,000 comes from the governor’s budget allocated to the school districts and ESDs.

123

Marshall

Agrees with Rep. Riley’s statement.

126

Hunsaker

Adds that extending this bill specifies where the funding would go, allocating the monies to small high school districts and high-cost students and not to the general school funding formula.

134

Chair Butler

Comments that dividing the total expended amount by the number of high-cost students equals about $35,000 per student. None of the $65 M is federal money; it is only from the local or state school funds.

144

Rep. Boquist

Uses Amity as example of the Chair’s previous question. Clarifies that the $83,967 expended does not include federal funding.

159

Hunsaker

Responds that Rep. Boquist’s analysis is correct. However, all ESDs are not funded equally, so some districts could be paying more or less accordingly.

166

Rep. Esquivel

Asks about conformity of ESD funding.

170

Hunsaker

Responds yes, but the differences are minimal.

189

Rep. Esquivel

Adds that the amount budgeted to ESDs is $125 M per year.

195

Chair Butler

Is there any potential that a school could recoup more than its outlay for a high-cost student by using the high-cost disability grants?

209

Hunsaker

Responds that each ESD would have to be analyzed to answer that question. If it does happens, the ESD is not getting rich. Any excess money is usually a small amount of money and goes back to the district’s special education fund.

230

Chair Butler

Makes follow-up comments on this topic.

245

Rep. Riley

Clarifies that even if an ESD is providing $25,000 worth of services, that amount cannot be used by the district for other ESD services.

275

Chair Butler

Wants to set up informational work groups with freshmen committee members.